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20. Memorandum of Understanding - Evergreen Disposal, IncCity of Kalispell Charles A. Harball Office of City Attorney City Attorney 312 First Avenue East P.O. Box 1997 Kalispell, MT 59903-1997 TO: Mayor Pamela B. Kennedy and Kalispell City Council FROM: Charles Harball, City Attorney Chris Kukulski, City Manager Tel 406.758.7708 Fax 406.758.7771 charball@kalispefl.com BACKGROUND: On the May 12, 2003 Work Session staff discussed the proposed Settlement Agreement with Evergreen Disposal, Inc. This followed an item on a within some annexed areas of the City that, pursuant to MCA § 7,2,4736, should have bee served by Evergreen Disposal. Since that time the City staff met with the principals of Evergreen Disposal and their attorneys and negotiated a resolution to the issue. Both the City and Evergreen Disposal addressed the issue in such a way that causes the least amoun of confusion and disorder for the public. We think that the attached agreement accomplishes this goal. 11,111 1 i A I I FISCAL EFFECTS: There will be a loss of some revenue in the Solid Waste division as well as city expenditures on cans that will be used by Evergreen Disposal. However, these "losses" are offset by the fact that no damages are being paid to Evergreen for lost revenues over the past ten years. It is not possible to accurately account for what the City may have gained or lost, or for that matter, what Evergreen Disposal may have gained or lost in this transaction. It is to everybody's gain that this matter has been resolved amicably. Respectfully submitted, Xz� Charles Aaf`k-f, City Attorney Chris Kukulski, City Manager THIS MEMORANDUM OF UNDERSTANDING is made this day of , 2003, by The City of Kalispell, with mailing address at 312 First Avenue East, P.O. Box 1997, Kalispell, Montana, 59903-1997 ("City") and Evergreen Disposal, Inc., with mailing address at 55 West Valley Drive, Kalispell, Montana, 59901 (`Evergreen"). RECITALS 1. WHEREAS, Evergreen is a properly registered Montana corporation doing business as a private, Class D motor carrier, authorized under a Certificate of Public Convenience and Necessity issued by the Montana Public Service Commission to transport and dispose of solid waste and provide recycling services within its permitted area both within and outside of the boundaries of the City of Kalispell; and 2. WHEREAS, the City is a municipality within the state of Montana organized pursuant to MCA Title 7, Chapter 3, Part 43, and thereby providing public services; and 3. WHEREAS, the City has annexed certain parcels of land, specifically listed in Paragraphs 2 and 3 of the Agreement section of this Memorandum of Understanding, within the last ten (10) years preceding the date of this Memorandum's execution, and began providing public services within each of those annexed parcels, including exclusive solid waste disposal service; and 4. WHEREAS, Evergreen, pursuant to MCA § 7-2-4736, has been entitled and authorized to provide exclusive solid waste disposal service within the geographic boundaries of each of those annexed parcels for a period of five years following annexation of each such individual parcel, absent a showing to the Public Service Commission that Evergreen is unwilling or unable to provide such service; and 5. WHEREAS, pursuant to MCA § 7-2-4736, even after the expiration of such five-year period following each annexation, Evergreen has been entitled to provide such service unless and until a majority of residents petition the City to be served by City waste disposal service and unless and until the City Council grants such petition; and 6. WHEREAS, Evergreen is both willing and able to provide solid waste disposal services in such annexed areas; and 7. WHEREAS, the City and Evergreen mutually acknowledge that certain annexed parcels which Evergreen has been entitled and authorized to serve under MCA § 7-2-4736 are more properly left under City waste disposal service, while other such annexed parcels should properly be served by Evergreen Disposal, with the goal of creating reasonably efficient and logically defined service areas; and 8. WHEREAS, the City and Evergreen mutually acknowledge that those residences and commercial businesses which are served by Evergreen after July 1, 2003, should not be subject to the city solid waste tax assessment; and 9. WHEREAS, each annexed parcel set forth below is designated by number according to the numbers of each individual City Council resolution annexing such parcels to the City, and each such resolution identifies the parcel annexed by proper legal description. Memorandum of Understanding, Page 1 AGREEMENT FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the City and Evergreen covenant and agree as follows: 1. Transition date. Upon execution of this agreement, the City and Evergreen shall work diligently to transition service to Evergreen in certain annexed parcels while retaining certain annexed parcels under City service, with such transition occurring no later than July 1, 2003, 2. City service areas. The City shall, on or before July 1, 2003, begin or continue to provide solid waste disposal services to the following annexed parcels, referenced by the following Annexation Resolution numbers: 4073, 4096, 4135, 4161, 4193, 4207, 4218, 4239, 4262, 4312, 4367, 4481, 4487, 4528, 4546, 4552, 4592, 4631, 4635, and those commercial accounts and residences within 4055 and 4174 served by the City as of the date of this Agreement. Any and all other commercial businesses or residences within the City boundaries served by the City as of the date of this agreement shall remain under City service unless such commercial businesses and residences specifically request service by Evergreen Disposal. In the event such requests are made, Evergreen shall provide two (2) weeks notice to the City before providing service. 3. Evergreen service areas. Evergreen shall, on or before July 1, 2003, begin or continue providing exclusive solid waste disposal services to the following annexed parcels, referenced by the following Annexation Resolution numbers: 4086, 4160, 4304, 4311, 4403, 4443, 4525, 4527, 4587, 4591, 4650, 4735, and those commercial accounts and residences within 4055 and 4174 served by Evergreen as of the date of this Agreement. New commercial accounts and residences within 4174 shall be served by the City unless such accounts request service by Evergreen or the City does not provide the type of service required or requested by such accounts. Any and all other commercial businesses or residences within the City boundaries served by Evergreen as of the date of this agreement shall remain under Evergreen service unless the majority of residents of within such an annexed parcel (as defined by Annexation Resolution) specifically request and are granted service by the City, pursuant to the statutory time periods and petition requirements of MCA § 7-2-4736. 4. Billing; information. The City shall transfer billing information, including names of residents, physical addresses, and mailing addresses, of each individual residence or commercial business now under City service and which shall, as of July 1, 2003, be served by Evergreen, to Evergreen no later than June 1, 2003. Such information shall be transferred and transmitted to Evergreen in a form mutually agreeable to the parties. Evergreen shall use such information to establish individual billing accounts for each affected residential and commercial account. 5. Solid waste ordinance. The City shall, prior to July 1, 2003, amend its solid waste ordinance to conform with the provisions of MCA 7-2-4736 and to provide that individual residences and commercial businesses served by Evergreen after July 1, 2003, shall not be subject to a City solid waste tax assessment. Individual accounts served by Evergreen after July 1, 2003, shall be removed from the solid waste assessment rolls by the City. 6. Annexation waivers. The City shall include language within its annexation waiver agreements for the extension of City services to explicitly and accurately reflect the limitations placed on City solid waste services by MCA § 7-2-4736. Such language shall remain in effect following termination of this Agreement, for so long as MCA § 7-2-4736, or other state statute or regulation, provides Evergreen with the right to provide solid waste service within annexed areas of the City. Memorandum of Understanding, Page 2 7. Containers. The City shall leave its 90-gallon residential roll -out containers in place for the use of those residents who shall be served by Evergreen Disposal under the service transition plan set forth in this Agreement. Such containers shall remain under City ownership and Evergreen may not sell or otherwise dispose of such containers. Nonetheless, Evergreen shall obtain and affix an adhesive label identifying the carrier as Evergreen to cover the imprinted City of Kalispell designation upon the containers. If the City encounters an unanticipated need to place such containers elsewhere within its boundaries, the City shall have the right to retrieve such containers upon providing sixty (60) days advance notice to Evergreen, so that Evergreen may obtain replacement containers. In the event such containers become damaged or wear out while Evergreen is providing service with such City - owned containers, and cannot be replaced under the City's warranty agreement with the vendor or manufacturer, Evergreen shall replace such roll -out containers at Evergreen's expense. Evergreen shall provide roll -out containers for new accounts within the annexed parcels to be served by Evergreen after July 1, 2003. In the event that any such annexed parcels served by Evergreen are returned to City service pursuant to the provisions of MCA 7-2-4736, Evergreen shall have the right to reclaim any such containers. 8. Future and existing annexations under Evergreen service. The terms of this Memorandum of Understanding shall have no effect on Evergreen's right to provide solid waste or recycling service to new annexations after July 1, 2003, or to already existing annexations where Evergreen is already providing service as of the date of this Memorandum of Understanding. Evergreen's right to provide service to such new annexations shall be governed by MCA § 7-2-4732, unless the protections of such statute are expressly waived by Evergreen by written notice to the City. The parties agree that the five year non -compete period, as established by MCA § 7-2-4736, begins for the entire area within the annexation boundaries upon the date that the City Council issues its resolution of annexation. 9. Other service. The City shall continue to provide free solid waste service to the public baseball complex on Begg Park Drive. Evergreen shall provide only containerized service, unless individual arrangements are made between residents and Evergreen for pickup of non -containerized materials. 10. Notice. At such as time as the City passes a resolution of intent to annex additional parcels of land, the City shall provide Evergreen Disposal with notice of such intent to annex, specifying the geographic boundaries of the parcels to be annexed. The City shall further provide notice to Evergreen when petitions are received from a majority of residents of annexed parcels seeking the provision of solid waste service by the City, as well as 90-days notice of the City's intent to accept such petitions and begin providing solid waste service. This and any other notice to be given under the terms of this Agreement shall be in writing and shall include a copy of the Resolution of Intent to Annex by the City. All notices provided under this Agreement shall either be served upon a party personally, or served by either first class or registered or certified mail directed to the party to be served at their respective addresses stated on the first page of this Memorandum of Understanding. Notice served by mail shall be deemed complete when deposited in the United States mail, postage prepaid. A party wishing to change its designated address shall do so by notice in writing to the other party. 11. Termination. All rights of the City and Evergreen under this Agreement shall terminate five years from the date of the execution of this Agreement, unless terminated earlier by the mutual consent of the parties. Following termination of this agreement, solid waste service within annexed areas of the City shall be governed by applicable Montana law. Memorandum of Understanding, Page 3 12. Time. Time is of the essence of this Agreement. 13. Other documents. The parties agree to execute any and all documents and approve whatever measures are reasonably necessary to carry out the terms and spirit of this agreement. 14. Governing Law. This Agreement shall be interpreted under and governed by the laws of the State of Montana. 15, Attorney Fees. Should either party incur any costs or expenses, including reasonable attorney fees, in enforcing any of the provisions of this Agreement, then the other or unsuccessful parry shall reimburse the prevailing party on demand. 16. Entire Agreement. This Agreement contains the entire agreement of the parties, and may not be amended or modified except by written agreement executed by all parties hereto. 17. Binding Effect. This Agreement shall be binding upon, and shall inure to the benefit of, the heirs, legal representatives, successors and assigns of the parties hereto. IN WITNESS WHEREOF, the parties have executed this Memorandum of Understanding the day and year first above written. For City of Kalispell By Steve Johnson Terry Kelly Brett Kelly For Evergreen Disposal, Inc. Memorandum of Understanding, Page 4